Economists Also Refer to the Normal Rate of Return on Investment

question 247

Multiple Choice

Economists also refer to the normal rate of return on investment as

• A) a residual cost.
• B) the opportunity cost of capital.
• C) the equity kicker.
• D) the fixed cost of entrepreneurship.

---

Definitions:

Bondholder's Risk

The risk that a bond issuer will default, resulting in the loss of both periodic interest payments and the principal investment to the bondholder.

Registered Bonds

Bonds that are recorded in the name of the holder on the issuing company's books, ensuring that only the registered holder receives interest payments.